EMI and WMG: into the end game

22 February 2011

Citigroup acquired Terra Firma’s EMI Group on 1 February and may look for buyers in the near future. Although Terra Firma paid far too much for EMI Group in 2007, it significantly improved the operating metrics

Warner Music Group has entered the fray as a buyer or a seller of music assets. We think WMG’s management will keep the recorded music division and sell Warner/Chappell

A pairing of the recorded music divisions of WMG and EMI will face moderate regulatory clearance risk; we discount private equity interest in recorded music assets amidst the industry decline, ill-suited to the PE model

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